Shares of Ashok Leyland has received a “buy” rating from global brokerage firm CLSA, which sees massive upside for the stock from current levels.

Journey So Far: In 2023, the commercial vehicle maker’s stock has surged over 24%, outpacing the benchmark Sensex’s 18% rise. The shares reached a 52-week high of ₹191 on August 16.

What Analysts Say: CLSA said its “buy” recommendation is based on expectations of 6-10% year-on-year growth in heavy truck volumes for Ashok Leyland. The brokerage set a target price of ₹238, suggesting a 33% upside from the stock’s last closing price. The brokerage highlighted the ongoing CV upcycle, supported by robust freight rates. It anticipates a double-digit increase in freight rates and e-way bills in the future.

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In November, Ashok Leyland experienced a 3% decline in overall sales, both domestically and internationally, amounting to 14,053 units. However, sales of light commercial vehicles saw a 9% growth, reaching 5,553 units compared to 5,087 units the previous year.

Cumulative sales until November 2023 increased by 7%, totaling 1.2 lakh units compared to 1.1 lakh units in the same period the previous year.

Ashok Leyland introduced the AL H6 Diesel – CEV Stage V engine and other innovative products at EXCON 2023. The H6 Engines remain a preferred choice for many original equipment manufacturers for both track and wheel Harvester applications, emphasising their reliability and efficiency, as stated in an exchange filing.

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